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11 October 2012

Equalization Changes and Hydro-Electricity #nlpoli

The federal government is considering changes to the Equalization program and the way it assess revenue from hydro-electricity, according to documents obtained by PostMedia News under the federal access to information system.

The changes would apparently take into account revenue from hydro-electric corporations in provinces like Manitoba, Quebec and Newfoundland and Labrador where a portion of the revenues from provincially-owned hydro corporations are sometimes passed directly to consumers in the former of lower electricity rates.

“Potentially, it’s a huge issue,” said Al O’Brien, chairman of the federal government’s 2006 expert panel on equalization, which examined hydroelectricity revenues as part of its analysis of the broader national program. “It will be controversial.”

He believes governments in Quebec and Manitoba recognize their fiscal capacity, or revenue-generating ability, is underrepresented in the current system.

However, any changes to how hydroelectricity is calculated in equalization could have a “huge impact” on how much — if any — a province receives from Ottawa in equalization, he explained. For example, some studies have suggested Quebec could lose billions of dollars in equalization payments if the true value of hydroelectricity were calculated in the program.

Coming up...

August 3

This is your political life: Ross Wiseman

Finance minister Ross Wiseman is the latest provincial Conservative to announce that he won't be running in the November general election. On Monday, SRBP will take a look back at three moments in Wiseman's political career that define the man and his political legacy.

Date TBA

Lions or Jellyfish: a review

Ray Blake's new book is in the stores or available from University of Toronto Press online. Blake examines the relationship between the provincial government in St. John's and the federal government through eight episodes from Term 29, through resettlement, to hydroelectricity, to the offshore, Meech Lake, and Equalization.

Date TBA

Changing the direction. Changing the tone.

The party that forms government after the November general election will face significant challenges from its first minutes in office. One of them will be changing the relationship between the provincial government and the people of Newfoundland and Labrador. In an upcoming series of posts, SRBP will look at the challenge of managing the government's relationships with the public.